news | Tuesday April 5, 2016
An article published yesterday in the National Observer argues that the offshore tax haven crisis won’t get fixed, despite the now-public Panama Papers. Bruce Livesay, the article’s author, writes:
In Canada, Stats Canada documents how much corporate money flows to notorious offshore tax havens. In 1990, only $11-billion was being “invested” in offshore tax havens by Canadian corporations: today this sum is almost $200-billion a year and growing. Moreover, an estimated $8-billion is also lost annually through tax evasion, although this sum could be more than $20-billion. […]
But guess what, this is old hat. Alain Deneault, who teaches political science at the Université de Montréal and authored a recent book called Canada: A New Tax Haven, has documented how Canada’s big banks were critical players in creating offshore tax havens in the Caribbean going back to at least the 1920s. He explains how Canadian banks got into this racket by helping out American and European banks trying to move their assets around the world. “Canadians actually transformed these jurisdictions into tax havens in order to satisfy the financial industry that needed to funnel these euro dollars outside any kind of traditional jurisdiction to manage them out of law without any kind of constraint,” he told me last year when we spoke about this issue.
Pick up a copy of Canada, a New Tax Haven for a more in-depth history of how Canada has turned to tax havens in the past, and how it has more recently become one itself.
Livesay concludes that
the Canada Revenue Agency (CRA) is happy to chase after small Canadian businesses or middle class individuals dodging some taxes, but the CRA doesn’t have the stomach or resources to go after the really big players socking away vast sums offshore. … So if you want to know why nothing ever happens with eradicating offshore tax havens, simply look at who are the beneficiaries – and who’s afraid of taking them on.